Micropayments Have Not Been
Implemented Very Well on The Web Thus Far?
The history of the web is full of
micropayments startups, who tried to give people an easy way to pay
for the online content. The industry saw many new startups like
Beenz, Bitpass, and peppercorn rise and fall. The two-pronged
challenges were first to actually build the system and then get the
people to buy using micropayments.
The key challenges or issues
impacting micropayments were as follows:
- Technical challenges: Electronic
micropayment is stored and transported digitally which require a
secure digital transfer platform. The digital transfer is by a
sequence of bits so it is easy to copy them. The key technical
issues are as follows:
- Security: Security implementation
is a challenge and has to be managed. Any failure of the underlying
technology, software, and hardware can decrease the trust of
micropayments.
- Scalability: The scalability of
change has to adapt to rapidly changing technology as the
transaction traffic increases rapidly.
- Reliability: Reliability is
important as micropayments must serve the customers 24 by 7 and 365
days a year. There should be no point of failure at any time.
- Interoperability: The
interoperability of cheques and tokens should be applied in
different micropayment systems. It should also work with different
systems of and protocols.
- Anonymity: It is the concern
related to how much information other parties have of others. The
banks and merchants have no anonymity, the customers have partial
anonymity. Anonymity is a technical challenge.
To conclude many
technical issues have not been addressed especially for making it
comfortable for use by the public and a wider audience.
Micropayments would
require people to pay for online content. The people are used to
getting content free and would be reluctant for paying to see the
new online or to download tunes.
The key challenges
are as follows:
- The barrier to access: Placing even
a small fee on the website will deter the consumers
- Changing habits: Placing a fee may
place a burden on low social economic classes and change their
internet use.
- Assessment of cost: The fee forces
the user to define if the content and its cost are
competitive.
There are certain
economic challenges which are restricting micropayments
implementation online. They are as follows:
- Transaction cost: First is the
inability of the companies to keep transaction cost low about the
actual transaction amount. Slowly the company has diverted to
prepayment or post-payment system.
- Mental transaction cost: The online
content will have to evaluated continuously against its costs. The
consumers will have to choose if the content is worth the value. It
will require decision making continuously. This results in the
ineffective implementation of micropayments.
- Value of free: The user is used to
getting most content free. The need to change the mindset and pay
for free content will be evaluated. The micropayment act as a
barrier to the usage of the content.